The psychological contract

The psychological contract is very important for employers to take care of.

Understanding employees through the psychological contract

What many employers seldom think of, is what their staff expect they must do. While there may be a very tight contractual obligation, signed by both parties at the start of the employment contract, there is also an implicit understanding of what each party in the work relationship is supposed to be doing. This understanding is called the “psychological contract” and is far more important for successful hiring and managing of employees.

Denise Rousseau identified this concept and has written extensively about it (although some state Argyris (1960) first came up with it). Here’s a short definition:“A psychological contract, a concept developed in contemporary research by organizational scholar Denise Rousseau, represents the mutual beliefs, perceptions, and informal obligations between an employer and an employee.” (source: wikipedia)

Employers, be aware!

Two other authors well-known in the realm of the psychological contract are Teresa Amabile and Steven Kramer. In the Harvard Business Review, they write what they call “[t]he first comprehensive look at what employees are thinking and feeling as they go about their work, why it matters, and how managers can use this information to improve job performance.” The piece has a clear message to line managers across all industries – to enable staff to get work done in an effective manner, things need to be made clear with constant communication.

They say: “Psychological contracts are largely reliant on promises between the employer and employee, with trust being the basis for the social exchange.” This shows that those hiring staff must be acutely aware more of what the employee thinks and feels, rather than what is written on their job descriptions (which often changes greatly from the original over time).

In contrast, as Zhuk (2008) states in his research paper, “[f]or many people, the only operative contract is the one they were hired under.” This means that some employees are confused when things change, yet the job description they have hung up on their office wall has not.

Constant communication is the key

When you, as a boss or superior, ignore an email by accident, the employee may wonder what happened. Regular meetings and chats with staff can bring up these small hiccoughs and brings the psychological contract back to a happy state, instead of breaching it by not adhering to the expectations of the worker. Knowing what they think they should be doing, what is going to happen to them, what you as a boss expect and what they will receive in return are all essential bits of information that are not written down anywhere.

Many top organisations review job descriptions on paper on a bi-annual basis. Some sales managers hold weekly catch-ups with their staff to keep the conversation about work more fluid. Both these ideas work well, yet whatever you plan to do, Amabile and Kramer (2007) give strict advice: make very sure you are aware of what employees know where the company is heading and why they as staff matter to the team, company and the firm’s clients.

Companies would do very well to bear the psychological contracts of their staff in mind and in doing so keep the work environment communicative and more personable. It could make all the difference.

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The Interviewer

The Interviewer is the blog and resource center of Jesse Green, an online recruitment expert. Jesse has for the last 6 years worked for various companies, successfully founding and exiting a few digital and online ventures. His passion is in classifieds websites, specifically in job classifieds. Prior to that, he was a top recruitment consultant for many years.

Online recruitment and job seeker advice for individuals and corporates.